That Was The Week That Was – 2nd Week July

From a Market Low in March, 2009 of 6443 on the Dow to the current 12,700 or so we’ve come a long way. Those investors that were in the market but left and sold some or all their holdings are now wishing they hadn’t. Others came back but only when the recovery was well under way. There is a lot to say about buy and hold, which I’ll save for another blog. Now getting to today’s point- The last year and a half have been miserable as the markets have settled into a non-discernable trading pattern. It’s almost random in its moves. Investors who short the market find themselves almost the next day on the wrong side as the markets go suddenly long. Others who decide to go long, find themselves looking at losses as Mr. Market laughs at them. Long- term buy and hold investors are frustrated from month to month as their accounts show either losses or back to even; and investment gains, when they do show up, are as thin as good news from Washington. Investors are frustrated and believe that there is a way to make money but no one is telling them. In the first half of this year some of the largest hedge funds that have the smartest analysts, fastest computers and most sophisticated software have seen either mediocre or poor returns. Global macro funds that make big bets on currency and interest rates were the biggest losers so far this year. In 2011 many hedge funds lost money. This year is bad but not as bad as last year. Still there is little to brag about. Most investors in hedge funds are institutional investors such as pension plans. The big Kahuna, of the hedge fund world, is John Paulson with his huge winning bet against mortgage backed securities in 2008. His hedge funds were the darlings of the hedge fund world amassing some $30 billion of new money. According to Bloomberg’s BusinessWeek in 2011 his two funds lost 36% and 52% respectively. At the end of May he is down 6% in one fund and  minus 9.3% in the other.  David Einhorn’s fund is up only 3.7% year to date. Explaining what’s happening,  ‘People are over managing their positions,’ said Peter Rup of Artemis Wealth Managers. Still there are investors who believe there is some ‘secret’ lurking in the dark. Unfortunately, even hedge funds with all their tools and savvy cannot unlock the kind of returns that will satisfy today’s frustrated investor.

Listen to My Podcast- All About Pension Rollovers.  Companies are attempting to reduce their pension liability (Ford and General Motors recently); and offering employees a lump sum distribution of their defined benefit pension. To make the decision on whether you should Rollover pension assets or not listen to my Podcast below. Click start below to listen. The entire talk is about 6 minutes. If you need more info call me at 586 783 7080 or send me an e-mail pstanley@westminsterfinancial.com

Listen to internet radio with Retirement Interruptus on Blog Talk Radio

Listen to internet radio with Retirement Interruptus on Blog Talk Radio

 

CNBC reported that the global credit crisis is causing a ‘kind of herd’ mentality with investors that is making it difficult to identify stocks and other securities that will deliver returns ‘above and beyond’ that of the market. This EU mess is making it especially difficult for Hedge Funds, CNBC reported Tuesday.

Banks Buying Your Biz…like a loss leader at he checkout banks offer a 10-year Treasury return on a One Year Certificate. There are savers that are frustrated with the current interest rate climate and are demanding safety, liquidity and yield. Unfortunately, that’s not all available. At www.bankrate.com the top four banks that offer the best one year certificate are: CIT $25,000 min and a 1.10%, MetLife 1.05% with the identical min, Ally no min and 1.07% and Discover with a $2500 min and .90%.

Cody Willard in Monday’s MarketWatch suggests that the time to short the ‘financials’ is now. He said he has been waiting patiently to bet big against the banks and with the Libor rigging scandal and almost $6 billion in trading losses for JP Morgan Chase this is a good time.

Remember This: Listen to What I Say and Not What I Do. Analysts telling us not to buy Facebook for all the reasons. Seems, according to Morningstar, 160 U.S. based mutual funds couldn’t help themselves, didn’t listen to their cohorts, and bought stock in Facebook whether or not Facebook fit in their fund criteria, or not. All sorts of different funds bought shares in Facebook and it didn’t really matter to the manager what kind of company Facebook is for them to snap up shares. According to the WSJ on July 9th, some of the fund managers may have been in the ‘game’ just to buy and sell as soon as shares bounced. Unfortunately, with the Nasdaq screw-up, they got caught and today own lots of shares in the company. The ownership of Facebook is far flung and more than likely the reader of this article may indeed own shares through the company 401k mutual funds. The following chart published in the WSJ with information provided by Morningstar.

this is Robert Gibbs, senior campaign manager for the President… and this is not…

Alcoa Reports First and generally sets somewhat the tone of reporting season. The aluminum giant has lately been off its feed as either price, volume or both have been lower than analyst’s expectations. The company stock has hovered between $8-$10, well off its bullish price of yesteryear. Second quarter earnings were reported last Monday at six cents, up a penny over consensus. That wasn’t the good news- the really good news was that AA expected sales to grow 7% and that allowed a small pop in share price afterhours.

Dull Market? Mark Hulbert, writing while on vacation in Canada, said low volume on the NYSE wasn’t anything new. Numbers kept since 1888 show that summer usually has low volume and there is no correlation between lack of buyers and sellers and what’s going on with the market. The month of September, The Hulbert explains, usually has great volume but its traditionally the worst month of the year. He concludes that there is no way that low volume leads to poor or mediocre stock market performance.   

 

Trading Firm in Futures Files to Liquidate.  A scandal involving a long-time commodities firm developing, according to last week’s WSJ.  Peregrine Financial Group is missing about $215 million of customer money. The CEO is hospitalized after attempting suicide. The possible theft was discovered after a shift earlier this year to an electronic on-line system for verifying customer funds. Up to that time brokers and regulators relied on paper statements from banks. Much like the Ponzi scheme of Bernie Madoff, who’s crime was discovered when the markets went south, so was the Peregrine Financial downfall. On the heels of the MF Global scandal commodities regulators shifted their customer commodity account verification system to on-line methods. The National Futures Association said that it was possible the CEO falsified bank records. Customers in all investments are urged to know where their money is at all times. Simply getting a statement is no longer a sure method. Verify that money is invested, where it is invested and how liquid those funds are are important steps to safeguard funds. SIPC does not protect investors in case of theft.

Car Manufacturers Are Pretty Smart… Anyone remember the days when cars were manufactured and stored on lots about the metropolitan area in the thousands? When Lee Iacocca took over Chrysler the story was that he saw acres of new Chrysler cars and asked who they belonged to. When the answer came back that they were all being stored by the Chrysler company it was then that he knew the company was in trouble. Today you won’t find that excess as I discovered shopping for a car deal. Most of the dealers I have talked to are already stocking 2013 models and almost all 2012’s are gone. Today car buying is almost like buying a custom suit. You want a car? Then order one, wait three-six weeks for delivery. This method of car buying and manufacturing of both domestic and foreign will pay dividends both for the companies and shareholders.

But…Adam Lass of Bottarelli  Research writes that there exists weakness in all of the domestic auto makers and some of the foreign car manufacturers. He goes on to report that further weakness precludes him from ‘buying’ any of the autos just now. He would feel more comfortable seeing ‘bullish’ support before making a buy recommendation. On Thursday Barrons.com reported that car companies are not about to go back to the good old days and ‘give’ cars away to entice buyers. Those days are gone and instead ‘value benefits’ are offered on year-end and sales events.

Remember Meredith Whitney and Her Prediction About Municipal Defaults? Ms. Whitney was the one who blew the whistle on the banking blow-out but was poo-pooed when she said communities and states would be defaulting on their obligations, causing consternation with tax-free bond buyers. Well, Ms. Whitney is getting some creds now that a few communities are filing for bankruptcy. Certainly it’s not like a avalanche of states cascading down hill. But, it gives one pause that buying a muni-bond should be done with care and best in a mutual fund or ETF where you have diversification.

The Fiscal Cliff is Looming Large. According to CNBC a lot of our current economic woes are based because Washington is allowing corporations to dangle in the wind, not knowing which way to turn. ‘Do we hire, not hire? Expand, spend money on equipment? Move into new markets?  Borrow, extend debt, buy back stock? Or, nothing at all?’ Until Washington settles down to do the business of the nation the markets and the rest of us will suffer, no matter the quality of our holdings. 

Supermarkets Caught Between Rock & Over-ripe Avocado…Biz stinks at the nation’s top chains as their stock price reflects lost business to either end of the …er…food chain- Walmart –Whole Foods. Even Dollar General and Target are in the food biz, sort of. Supervalu, a 4400 store Minneapolis based chain, saw its stock plummet 40% when it put itself up for sale and suspended its dividend. The WSJ reported Thursday that supermarkets cannot keep doing the same old things they did in the 1990s and expect a better result. Things have to change. Until they do experts say avoid some or all of this sector.

the above info source from individual grocers and chart/graph source WSJ. Thursday July 12, 2012.

CHINA GROWTH SLOWS IN SECOND QUARTER TO 7.6%. THE SLOWEST PACE OF GROWTH IN THREE YEARS. Merrill’s China analyst Ting Lu said that the slow growth could represent a trough of the current cycle, with activity to pick up in coming months as pro-growth policies put forward by Beijing in May start to kick in.

Gambling Stocks with Macau Exposure Lowered… according to Sterne, Agee and Leach, on second quarter estimates too high. Although investors would like to own shares in Las Vegas Sands, Wynn Resorts and Melco Crown Entertainment at the current levels. Sands is down 30% off its 2o12 high. Sterne, Agee has lowered earning expectations but believes a positive Macau sector sentiment will return in the relatively near future. In the meantime keep an eye on the above companies in the world’s hottest gambling market.

Ford Mo Co Sales Down Sharply in Europe. So what didja expect?

Friday Markets Up on JP Morgan Chase better than expected news, even as the bank disclosed higher losses from their opps trading earlier in the year. Still markets showed guts as Dow up over 200 points. Next week more earnings and Talmer Bank’s Tim Basset wrote that this could be the first negative quarter growth in 10-quarters. He goes on saying ‘that at the half-way point in the year equity markets have still maintained much of their positive momentum from 2011.’ To me this year has been almost like a golf duffer getting beat up only to have one or two spectacular shots keeping him from stomping off the course.

The key is the consumer. Saying it best was Stuart Freeman of Wells Fargo who is quoted, ‘At some point the consumer needs to make some purchases to get on with his or her life, and we’re seeing signs of that.’

Finally…One Bank Closed Friday bringing the total year-to-date to 33.

Don’t have someone on your side as a financial planner, broker or investment professional call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. There is no charge for initial meeting.

That Was The Week That Was-1st Week July

  I wish I had a nickel whenever someone complained to me that not all their investments go up at the same time but they ALL go down at the same time. Buying different sectors and/or asset classes in one portfolio is called asset allocation. The concept of asset allocation, if done even moderately correctly, should have non-correlated assets moving one way while others move in another. It’s even okay for some investments to do nothing. The concept is to reduce risk and potentially increase return. Return is maximized by moderating down periods while the minimization of downside maximizes upsides. At least that’s the theory. Famed index fund creator Jack Bogle has preached owning only two assets- the total stock portfolio fund and the bond fund. He has said you can live your entire investment life rather well owning only those two. Unfortunately, in today’s world owning only two asset classes does not please the investment public or their investment managers. There are ‘holes’ to fill where investors and managers ‘think’ they see opportunities, and yes, even weakness.  Equity Markets are being see-sawed today on a regular basis. This is happening  more in times of discontent than perhaps in all the years I have been in this industry. This has frequently caused many equity asset classes to now move in tandem. So, for example, when a large cap value fund goes down along with the small cap growth fund it could mean that both hold similar investments; or both are being liquidated as investors rush to cash. (Apple is owned by various sector funds, for example). Even if an investor stretches their allocation to agriculture, real estate, metals and other more exotic and less correlated assets there is no guarantee of the perfect allocation in today’s world. But if you are complaining when some assets go up and others do not it is a ‘possible’ sign that your allocation is working. In this climate its hard to know for sure.

THE GOVERNMENT HAS FINALLY FIGURED OUT HOW TO TAX PEOPLE FOR DOING NOTHING. i got relations that’ll be awfully sore.

Justice Roberts, ‘ It is not our job to protect the people from the consequences of their political choice.’

White Castle. Home of the slider. The company has offered its employees health care ever since Cal Coolidge was in office. Jamie Richardson, President of the firm, said,’ Just because something is constitutional to us it doesn’t necessarily make it a good idea.’ Insurance premiums for  Nottingham Spirk, the company that makes the disposable SpinBrush electric toothbrush, among other items, was increased by 15%. The insurance company told the firm that the hike was based on anticipation of the new health care mandate.

Two Schools of Thought. Factory activity in the U.S. shrank in June for the first time since July, 2009. (That’s 2009 and not a misprint!) According to WSJ the rest of the world is slowing, too. Momentum is grinding to a halt as this appears to be a definitive proof that the European recession has reached the shores of the United States much like the flotsam from the Japanese tsunami . Not only are we seeing  slowing here but China is certainly slowing, even though they appear to be tossing money at building high quality steel mills in remote areas where nothing is happening. But…according to economist Gary Schlossberg at Wells Capital, this may be a ‘bottoming out’ period and good for the economy. A shortage of skilled workers also shows that businesses could hold off hiring until they get a better take of the future. Also, housing seems to be a bright spot in the U.S economy. Construction spending has increase o.9%, and Schlossberg says it could provide support later this year.  Home Builders according to MarketWatch may be 40% over bought.

Blackrock Called…and I spoke with the inside guy at the firm and we yakked about the abysmal price of oil. In fact the US of A has oil coming out of the wazoo. So much of the stuff is being stored that there is an official glut of oil. However, before you toss the energy funds away this could be a temporary situation. Blackrock explained that the U.S. could very well be a net exporter of gasoline this year. And reliance on foreign oil is slowly falling. But, with a slowdown in Asia and the E.U. the need for oil has slackened while production has slowed. A small but crucial respite  in the price of crude as dividends are still being paid on energy investments and reinvested at lower share prices. The value to investors  will be understood as the economies gradually get healthier. More of the stuff will be needed to fuel transportation and factories. Then as world-wide use increases the prices will rise. The strong dollar contributes to the lower price per barrel, and you should know that.

Fourth of July Eve as Markets Continued Their Ascent. A shortened trading day. It sort of felt like that Price is Right Game with the mountain climber yodeling his way up the hill as a contestant guessed the price of prizes. In other words- slow, steady with no real surprises. Gold for the day was off a bit, as was domestic crude. Brent oil hit a recent high as concerns over Iran saber rattling. The Dow ended up 73 points. David Rolfe of RiverPlace/Wedgewood Fund said in a WSJ interview that it was a good time to own Berkshire Hathaway shares, given their recent under-performance and Apple to $750. This is David… and this is not…

Everyone Who Had Their Power Knocked Off on Tuesday Raise Their Hand….! Not only did the storm race through town, knocking off all my civilized toys, but a new law in Michigan allows any blankety-blank to purchase semi-automatic firecrackers that replicate the sound of the London Blitz and reenact the event under my bedroom window. 

 Book Writer & Money Manager Howard Marks was interviewed by Morningstar’s Jason Stipp. Marks is publishing an illuminated edition of his original book that included his letters to shareholders. He points out that the individual investor may well be better off than the institutional investor for several reasons: Individual is more nimble, and can cut losses or move out quicker. (2) Institutional people have job fears if they do something wrong. (3) Then there is the institutional culture of competing with other institutions. Marks also says that European stocks should be cheaper even if an investor doesn’t know the EU outcome. He offers this as a chance of cutting risk in buying certain industries and stocks.  (Which goes in the face of common knowledge of not buying cheap stocks that could get cheaper or maybe I just didn’t understand the entire interview.)

TEVA –The generic drug giant got a boost Wednesday from Johanna Bennett at Barrons.com. According to Jo Teva stock could return 30% in the next 12 months. This is in the face of the shares dropping nearly 38% since April 201o. The analysis concludes that Teva is a cash machine with about $4 billion a year in free cash flow which would allow it to repurchase stock, boost its dividend (currently 2%) and invest in new drugs. Morningstar gives the stock 4 stars and a value of $55 a share up from its current est. $40.00.

Andy Griffith Museum in Mount Airy, NC.

and…

 

Heard  on the Frank Beckmann radio show….Many small to medium sized Michigan employers may opt out of providing health care insurance for their employees and instead pay the $2,000 per employee penalty, which is far less than the cost of health care. Employer provided health insurance may well be over.

Median Family Income drops 2% in 2012.

LIBOR pronounced lie ber is London interbank offered rate. Barclay’s CEO resigned when it was discovered his bank fudged numbers used in calculating Libor. The Libor number is supposed to mean the rate that banks will lend to each other and what they will charge consumes for loans. Bond rates are also calculated to some degree off the Libor numbers. By fudging numbers banks can charge customers more and themselves less.  It’s a way of making lots of money in plain sight. When asked one economist said the Libor was what banks did not charge each other but used to charge customers. There are eighteen global banking institutions that contribute to the Libor number. Investigators are discovering that there are about a dozen financial organizations that manipulated the Libor and Barclays is only the first in the dock. Experts contend that the cost could exceed one billion dollars, according to Thursday’s WSJ, on July 5th.

CBS News Reported by 2020 China Will Buy 30,000,000 autos a year.

Which brings me to Ford, which got a small bump last week, but nothing of substance. According to David Sterman of Street Authority, he likes the stock to double. Normally, David wrote, he would be a seller of Ford as news of lower earnings caused the stock to fall. But, he isn’t a seller of Ford as he thinks the news is overblown and the company is profitable in North America, and should do even better in the coming quarters. The company will have the new Escape and Focus in showrooms and this should spur new sales. He calls Ford a cash producing machine and believes that the company will have some $31.5 billion in cash in hand by the end of 2014.

Hasbro, Inc., is one of the largest companies in the toy business. Recently I’ve noticed several analysts posting their opinion of the company; and Morningstar gives it a four star rating. The ratings firms reports that they think that Hasbro has a significant lead over their competitors in the digital and entertainment sectors. They give the company a fair value of $43, in addition it pays a 4% dividend. The company also has a stock buyback program and has been increasing its dividend almost 15% over the last five years. With its huge licensing business well established ( Star Wars!), the company has a stable cash flow, according to Morningstar analyst Jamie Katz. 

Hold On! We Got Ourselves A Global Stimulus! Yes, sir, Bob, by gum, reports Friday of ‘coincidental’ bank action by the Bank of England, People’s Bank of China and ECB  that rates on benchmark short-term lending slashed (The ECB to (gulp) zero, the Bank of England to near zero and China cut by 0.31% to 6%). Plus the Bank of England announced an increased bond buyback program to cut long term interest rates. Central Banks in Kenya and Denmark also sought to cut credit costs.  With all that markets virtually ignored the action. On the home front domestic markets fell slightly as most traders were on holiday. Those who were not were waiting for Friday’s jobs report.

Last Year I reported to you about a Hedge Fund that promised Louisiana pension funds a ‘guarantee plus 100% liquidity’. ‘Buddy’ Fletcher ran the Fletcher Hedge Fund. In the early 1990s he reported that his fund earned 300%, and he was then viewed as a market ‘super star’. Hard times followed and the firm has filed for bankruptcy as clients have failed to get the ‘promised’ funds they had invested. No secrets, friends. More news on hedge funds in next week’s blog.

Friday’s Jobs Report Disappointed …as usual. The President has four more reports before the November election. If things don’t get better there could be a new occupant come January in the White House. ‘The’ Donald called the President’s policies, stupid. There have been moments over the past several years when there seemed to be promise of a jobs breakout only to see some global event trigger a regression. The Japanese tsunami and Arab Spring were largely to blame for a lack of economic progress last year.  Kathy Bostjancic, of The Conference Board, said, ‘This economy has no forward momentum and little help from monetary or fiscal policy.’ (I am scratching my head wondering when the last time I heard of any jobs related effort by our elected officials and I have to say Kathy is right.) Markets fell 1% on the news. The NY Times also reported that some companies will hold off hiring until they better understand the health care mandate and how it impacts their bottom line. Also, the Times reports, domestic lawmakers inaction on the upcoming ‘fiscal cliff’ creates uncertainty that is not conducive to hiring.’ …there is a lot of stupid going on in Washington.

Frightening…language Friday…as some internet financial sites deemed it fair to report that ‘Stocks Plunged!’. The concept of something plunging reminds me of 2008 or going over the Niagara Falls in a barrel. Certainly stocks fell but plunge wasn’t a word I’d use. Still stocks came back from their lows to close with the Dow off 124 points and  Naz off 39 and S&P finished  down 13 points. Gold and oil also off. For the week both Dow and S&P down but Nasdaq was slightly positive.  Tech took a beating Friday as did industrials. Global stocks like Cat came under pressure, as did materials. Nervous traders saw Spain’s 10-year note trading back to 7%.

Weak Jobs Could Drag The Fed Back Into The Game… The Ben Bernanke did say the Fed was prepared to do  whatever was necessary. According to the WSJ the more active central bankers believe that more action is justified because the economy isn’t making progress toward unemployment and inflation is low. What the Fed can do is still not clear. Some suggest that the Fed consider purchasing mortgage bonds as a more effective way of lowering a broad range of interest rates. Others suggest recommending not to increase rates until 2015, rather than late 2014. We can only wait and see what the Fed offers in the next few weeks.

Questions? Call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

That Was The Week That Was-5th Week June

  For some investors hunting for safety and fixed income higher ‘than ordinary’ yield opportunities  rarely ceases. They scour the earth and internet looking for deals. Investors are now cautioned that at some point, in the not too distant future, tactics need to change. United States Treasuries, at this point, don’t seem to offer much in yield (or appreciation) and, like a recalcitrant house guest, who has overstayed their welcome, common sense dictates that there has to be a parting of the ways. The ten-year Treasury sports an approximate yield of 1.65%, and it may well be overdone with whatever future appreciable capital gains to be squeezed out of it. It doesn’t seem conceivable that the Federal Reserve’s Operation Twist can lower rates even more over the next six months. Still, nothing surprises me in this fixed income market. Morningstar reported that the fixed income sector is at the ‘Foothills’ of change. Corporations that pay dividends are the du-jour Love-Child of Investors, and some public companies are instituting paying a dividend only to reap investment ‘needed’ dollars. The number of S&P 500 companies that are paying dividends has reached 400, a 12-year high.  A decade earlier companies that instituted dividends were considered ‘slow-growth-income’ and investors shunned them. Now investors are shifting their focus to both safety, income and growth. Many of the companies that had healthy dividends have seen their share prices increased to levels that investors may find uncomfortable. Still there are others, according to Wallace Witkowski, of Dow Jones, that may be just the deal for investors willing to buy and hold. The following companies have a decent payout and little debt. Here are four household names from Witkowski:

• Walt Disney
• CVS Caremark
• Colgate-Palmolive
• Cummins

What Some Experts Like: Morningstar reports that some investors think that stocks are not attractively priced. The analysts at Morningstar say ‘no-way’. The following are a few areas they’ve liked back in April of this year and some they still think have a lot more gas in the tank: Large Cap Value (stocks like GE, Abbott Labs and Johnson and Johnson); Energy sector (all beaten up and back in April energy was 14% undervalued and my little grey cells tell me the sector is undervalued a lot more in June!) and Financials (banks were downgraded by Moody’s last week but traders think this was way overdone. We’ll wait for earnings, there’s always a surprise.) 

Something Old, Something New and Someone May Be Blue….Managed Futures. Investors may see a new type of investment in their asset allocation from certain managed account firms- the Managed Futures Fund. Morningstar reported last week that Managed Futures usually have been reserved for Hedge-Fund-Like Investors, the Daddy Warbucks kind of folk but until now no investment firms have managed to bundle them into a mutual fund for us regular peoples. Managed Futures are now being touted as the latest Trend in alternative investing. The concept is that these un-correlated assets are able to reduce risk and increase return in an investment portfolio. The Managed Future fund invests in currencies and commodities to be bought at a future date and price. There are barely a handful of these funds to invest in and none have done an exceptional or even adequate job of preserving principal or making money. Read your statement and make sure you’re not buying something you possibly may not need and may cost you money.

Dan Dorfman, 82, Died June 16. Before Jimmy ‘The Mouth’ Cramer there was Dan Dorfman. Dorfman was so influential that the SEC instituted the Dorfman rule. Stocks he recommended 95% surged on average 13% and those he bashed lost just as much, if not more. Dorfman was huge in the 90s appearing daily on the now CNBC cable show and writing for Money Magazine. In addition you could catch him on Wall Street Week with Louis Rukeyser. In his later years he reported for the Huffington Post, after fighting off allegations of illegal insider trading. The sad thing is that the WSJ devoted a bare paragraph to his passing while the NY Times was more generous. What have you done for me lately in this biz continues even at death…

FYI…Fat is a problem in Kuwait. Read this somewhere but fast food, introduced by U.S. troops in-country, after first Bush war, is causing huge problem with Kuwait adults. Stomach staple operations very common.

Kraft Foods largest company to switch from shares on NYSE  to NASDAQ effective June 26th.  

Hunting for Greek ‘Gems’… George Elliott, founder of Naftilla Asset Management, has raised about $63 million to buy nothing but Greek stocks. Elliott, who says he has a history of buying distressed assets, refused to talk to anyone who had not taken advantage of the Russian currency crisis of 1999, the S&P 500 stock market crash of 2009 or the Argentine default a decade ago. He considers those moments the best investment opportunities in the past 20-years. Elliott is 39 years old.

Woody Allen’s School of Productivity. Funny man, director and writer has some rules of work that was shared in the pages of Bloomberg BusinessWeek June 25-July 1, 2012: John Lopez reports the philosophy:

• Have a Life
• Watch Your Margins
• Just Keep Swinging
• Don’t micro-manage
• Change slows you down.

Microsoft’s new tablet is super-keen- neat-o. Its thinner than Apple’s and made of ‘vapor deposited magnesium’. It’s called Surface and should arrive in October. The tablet’s protective cover also doubles as a keyboard. ‘ Golly- folks! It’s made of vapor deposited magnesium! How cool is that!   That’s almost better than kryptonite.

Once upon a time… a company called GMAC bought another company called Residential Capital. Rez Cap almost sank GMAC with its bad mortgage loans. Rez is bankrupt today and Fortress Investment Group, a hedge fund, is offering $2.5 billion for the mortgage business. GMAC was once owned by General Motors and today is an independently owned bank renamed Ally Financial. If you understood half of that – you’re a financial expert!

If you hold an investment longer than five days you’re considered a new millennium long-term investor. According to CNBC Monday the average holding period for the S&P 500 index is five days. True liquidity has not come back to the markets and short term players and high frequency traders rule. Partial to blame is ourselves as long-term fundamental investors.

Gosh! Markets were off a lot on Monday but came back off their lows to finish, well, off a lot but a lot less than where they were. The Dow was off 136 and the S&P lost 56 and everything else was off, and there wasn’t a whole lot of anything to blame except Europe. And, European politicians. Let’s not forget the pols. Sterne, Agee reiterates that Ford is still their top pick in the auto stocks.  They have a Buy on the stock and an $18.00 price tag. Earnings of $2.00 per share are still unchanged even though softness in European sales down 5.7% the first five months of 2012. Russia and U.K. sales have picked up the slack and South American sales are also down, and that weakness, according to Sterne, may continue through the rest of 2012. Industry fundamentals for Ford which include pricing and cost performance all remain on track. Shares have not performed as well as the company has with current share price closing last Monday at $10.19. On Friday news that Ford would not make analyst projected earnings caused the stock to be badly beaten up by Mr. Market. Shares closed to $9.50.

An Acquaintance of Mine Buys Only New Homes. He’s a snob about stuff like that. He gives a sniff of his nose when you say you bought a ‘used home’. You may as well have told him that you bought used socks and shoes and wear them. He’s a ‘new money’ kind of guy. And with ‘new money’ comes ‘new money’ rules. And so I thought of him when I read that ‘new’ home sales rose over 20,000 units more in May than was estimated by the Washington Tea Leaf Readers. There still is a record of ‘previously owned’ homes on the market but, according to Commerce Department, new home sales were up. That means that people want new and there is cheap money to do it with. Recently Toll Brothers broke ground on a new 2,000 home project in Orange County, California. This is a significant but small move. Overall Builders broke ground on 516,000 single family homes last month. Toll Brothers reported profits that bested estimates in the second quarter. I told you about watching home builders, now didn’t I!

Cody Willard wrote that Facebook is still a buy and every ‘tech’ money manager is trying to build their own FB position now that the stock has stabilized.

Consumer Confidence at 5 Month Low! Yes, I was shocked too (tongue in cheek) when I read that failure of the government to address jobs, taxes, housing and entitlement programs, while the stock market stagnates and Europe threatens to infect our economy has caused most Americans to lose confidence. U.S. companies, like Ford, are keeping an eye on the public’s attitude. Bloomberg, last Tuesday, confirmed what everyone knows and that is the stock markets fluctuates between gains and losses, in a narrow trading range that is almost impossible to predict. It’s not fun anymore! People are sick and tired of being sick and tired. Expectations are slowly dimming. Even people who have money are not spending as Darden Restaurants, owner of Red Lobster and Olive Garden, reported an unexpected drop in sales at their older establishments. The consumer is getting more cautious and even the drop in the price of gasoline is not luring the buyer out to play. Unemployment has held over 8% for over 40 months, the longest historical post WW2 period. The country cries for leadership and for the leaders to lead with confidence.

There is at least One Analyst with a Happy Face and Confidence! Tom Dwyer, Chief Equity Strategist at Canaccord Genuity, think the S&P has another 250 points of upside, at least! His reasons are a historic drop in interest rates, low energy costs and a slow recovery in housing. ‘It should spell gains for the market,’ he said to CNBC.

Questions? Call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.